Pestel and Swot Analysis of Addison Lees Taxicab Company - Essay Example

ADDISON LEE’S TAXICAB COMPANY By 12th, November, Addison Lee’s Taxicab Company Addison Lee is Europe’s largest minicab company and chauffer business, which is based in London. John Griffin, who was born in Ireland to an engineer father, took over the management of the company in 1975 after the company had started to dwindle due to his fathers’ inability to manage the taxi company. The company now operates 3000 premium mini cabs, 200 Mercedes E and S class transport vehicles, courier cars, lorries, vans, and coaches across London. The company has grown exceptionally to employ 900 back office staffs and more than 4500 drivers (Jones 2008). The company’s car hire market is a highly competitive business environment where only the highly successful business companies which provide consistent excellent customers services survive. Addison Lee is one such company, which constantly improves operational performance and more work with the existing resources that they own (Hamm 2004). The company has embraced the latest technology in the market in order to attract and provide good customer outreach in most parts of Europe. This paper looks at the strengths, weaknesses, opportunities, and threats of the company as well as the political, economic, social-cultural technological, environmental, and legal environment in which the company operates. PESTEL Analysis Political Environment It has been noted in 2009 that UK is one of the biggest tourist attracting cities in the world. The city of London located in England is the largest city. It has a population of more than 7 million people and receives more than 6 million visitors annually. The country has many historic tourist attraction sites as well as properly established institutions, which forms a model for many other institutions in the world. The political systems in the country as well as the economic systems of business provide a unique environment for businesses to thrive and prosper (Moore 2010). The UK has a traditional of being a capitalist nation, which believes in giving the private sector a chance to develop and grow its portfolio. This is one of the contributing factors to the company’s tremendous growth over the last few years, where the company gained acknowledgement as Europe’s largest taxicab company. In order to attract direct investment in the taxicab business in the country, the country has created an open door policy since the World War 2. One of the main reasons for this motive was to secure financing for modernization with capital liberation as well as provide transport to people who could not be able to acquire their own. The country also provides the needed protection and privilege to anyone who is operating a private car hire company. Additionally, the country has also provided them with access to the markets and transport industry as well (Sebens 2012). This has been done through the elimination of trade barriers such as the licenses required operating the taxicab businesses within the city. Britain, as well as other countries in Europe where the company operates, are members of the world trade organization. This has opened the taxicab business to the company, which can now operate even beyond borders of the country. The political policy adopted by this country has enabled the company to grow and expand whereby the company can transport its passengers across the borders. Many policies in the taxicab industry have been developed and high tariff standards decidedly lowered in the country. The large population of England as well as increasing purchasing power has made England enormously attractive to investors as well as tourists in the country who uses the company’s taxicabs (Tita 2003). The main purpose of the English government in terms of the policies in its privately operated taxicab companies is to encourage the domestic car hire businesses with the help and knowledge of its advanced systems. The incentive policies of the country have enabled the company to utilize foreign as well as domestic operational platforms in order for the country to set pace in the global taxicab arena. Additionally, there is a joint venture between the company and other companies across the border, which operates similar businesses to do a merge and form a conglomerate to operate such business in Europe (Lin 2006). According to Valentin (2001), the country has issued new development outlines for the automobile industry since the year 2009. These outlines present a comprehensive development tactic that includes industry development, upgrading, technological enhancement, and promotion of new business ideas. Economic Environment It can be noted over the years that the country has adopted and well utilized a more comprehensive business inclined policy. Since the country initiated open policies, Addison Lee’s taxicab business has experience a rapid and continuous economic growth whereby it has obtained a key role in the privately hired taxicab businesses (Helms and Nixon 2010). This means that the company has attracted big international investors who buy cars and advances them to Addison Lee’s Taxicab Company. The large business portfolio created has enjoyed huge economies of scale by taking advantage of the big prospects in business growth and the low cost of operation. Besides, the company is able to benefit from the high business profits obtained from large fleet of its vehicles comprising more than 3500 cars. The countries large market size as well as being a hub for tourist attraction in the city also contributed tremendously to Addison Lee’s Taxicab Company business growth and high profit margin alongside creating a dominating position in the global market place (Waller 2012). Social or Cultural Environment Blackhurst (2007) notes that, England possesses many cultural traditions and habits that distinguish the country from other European and Far East countries such as China and France. It is well known that a cultural difference in a country highly affects the business practices. It is henceforth extremely significant for Addison Lee’s Taxicab Company to realize the differences that mostly are brought about by the tourists whom they transport to different places. It is also very important for Addison Lee’s Taxicab Company to be empathetic with the fact that, English business values are strongly influenced by the company’s commercial activities, business morals, and organizational behavior. This is different from the concept of business relationship from other countries such as China’s “Guanxi” business relationship. If Addison Lee’s Taxicab Company can embrace such fundamentals in its business operations, the company can experience a tremendous growth since as will be able to attract more people to its businesses. Besides, Addison Lee’s Taxicab Company can increase competitive advantages through developing its networks of business relationship. To sum up, the development of a good business relationship by Addison Lee’s Taxicab Company can be regarded as a major competitive advantage, which has enabled the company to face out competition and acquire more resources to overcome vehicle shortages (Osei-Owusu 2009). Technological Environment Ta-Tao & Surya (2000) asserts that, the encouragement policies implemented in the country with regard to Addison Lee’s Taxicab Company have led the domestic private car hire business to huge investments and profits concerning transport facilities and new technology in measuring the distance covered by the taxi and attracting new and existing customers. With this initiative, the company is making an effort towards creating its own standards. For instance, the company has liaised with Magenta Company to provide it with hardware and software infrastructure to use to manage its operations. The company made a step forward in 2006 in order to adapt to a new technology and shift from the existing operation platform that found it difficult to cope with the growing dimensions and advanced operational approaches applied in the business. Addison Lee’s Taxicab Company therefore commissioned Magenta Company to develop “Shamrock,” an innovative endwise operational and automatic scheduling platform that was capable of supporting Addison Lee’s Taxicab Company’s determined business growth (Duff 50). Environmental Factors The environmental factors in England’s automobile industry further enhance the new technological trends in privately hired vehicles sector. Addison Lee’s Taxicab Company has adopted “green car” technology that is the propensity across the world especially in England where the mayor encourages this policy. The company has also put more efforts to oversee that their vehicles do not over consume oil, and reduce air pollution and sound pollution caused by the traffics of its cars. Moreover, the company has designated specific areas where it packs its cars. This policy is very important with regard to future prosperity of the global car hire ubiquitously (Ta-Tao 2000). Legal Environment In terms of the county’s legal and supervisory framework, notwithstanding the many principles and notices with regard to privately owned businesses, it is a fact that the country has achieved high levels of transparency in businesses. In recent years, the country’s government has tried to make the legal and regulatory environment for investors less complicated in order to encourage competition in all business environments and discourage any existence of monopolies. This has been achieved through elimination of any contradictory licenses, inconsistencies, ambiguous and subjective enforcements (Osei-Owusu 2009). SWOT Analysis Strengths of the Company Addison Lee’s Taxicab Company is the largest taxicab in England as well as the entire Europe. This means that the company enjoys large economies of scale from its operations across Europe and England specifically. This also means that the company is able to benefit from the high profit margins, which it makes as compared to other companies across the region. The company has also created a large customer base that is well aware of the company’s business and diverse services. The large business portfolio of the company also means that the company is able to pool risks and cope up with the small losses, which occurs such as loss of a car through an accident. Moreover, the company is able to insure its passengers as well as the cargo through comprehensive insurance schemes that covers the company (Jones 2008). Weaknesses of the Company Addison Lee’s Taxicab Company has a large fleet of vehicles that at times becomes very difficult to manage. This has made the company to incur huge expenses in running and operating the business as well as developing the “Shamrock” operating system. The company also incurs huge expense in compensating its victims for losses incurred in cargo transportation as well as compensating passengers in case of an accident or loss of property. The company has also suffered from incompetent drivers who cause accidents due to lack of an elaborate recruitment strategy for the company. Addison Lee’s Taxicab Company has also incurred unnecessary expenses in indemnifying any fines or payments that the company’s drivers would incur while using the bus lane that is against the will of the Transport for London Regulation. In addition, the company has concentrated its operations in England instead of diversifying in other countries where the operations of taxis is much needed (Tita 2003). Opportunities of the Company Addison Lee’s Taxicab Company should embrace technology in its operations to confidently grow. By embracing technology, the company should be able to seize additional business data, business management details, client preferences, and requirements with new efficient operational areas to be included on top of the existing ones. With the expansion and increase in job volume, the company needs to develop new systems that will monitor hiring of new drivers, training, and supporting them in order to cope up with the growing business scale. Moreover, the new business systems would automate the majority of the majority of key business processes therefore giving the staffs and management an opportunity to tap in new developing markets. The company should also consider diversifying its business portfolios to other countries where there is a higher demand for privately hired vehicles such as Spain as well as delegate authority from the company’s headquarters in London (Sebens 2012). Threats of the Company The company is faced by many threats such as increased ownership of cars by individuals, which threatens to eliminate the company from business. Moreover, the company is faced by the threat of emerging companies, which render the same kind of services offered by this company. Such companies include Fargo cargo couriers, Group Four Securities, UPS, and DHL, which provides transport services (Moore 2010). Works Cited Hamm, A 2004, "New taxi company plans to give Yellow Cab a run for its money", Silicon Valley/San Jose Business Journal, vol. 22, no. 20, pp. 6-6. Blackhurst, C 2007, Evening Standard, London, Chris Blackhurst column, Washington, United States, Washington. Duff, A 2010, Honest John, Institute of Directors, London, United Kingdom, London. Valentine, E 2001, "SWOT analysis from a resource-based view,” Journal of Marketing Theory and Practice, vol. 9, no. 2, pp. 54-69. Helms, M & Nixon, J 2010, "Exploring SWOT analysis - where are we now?” Journal of Strategy and Management, vol. 3, no. 3, pp. 215-251. Jones, B 2008, Exclusive taxi contracts called unfair: Drivers for other companies protest Yellow Cabs deals at hotels, hospitals, Penn Station, Washington, United States, Washington. Lin, H 2006, "Ethical Applications of Technology in HRD: A PEST Analysis and Implications", Performance Improvement Quarterly, vol. 19, no. 4, pp. 91-105. Moore, R 2010, Taxicab company gets green light: Olive Garden plans move ahead, Washington, United States, Washington. Osei-Owusu, P 2009, Leadership, workforce, and technology and bus transit performance: A synthesis of select systems in North Carolina, University of Phoenix. Sebens, S 2012, City, cab owners share burden of downtowns taxi problem, Washington, United States, Washington. 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